Why – and How – to Hire Young People Without Diplomas

When an executive at global services firm UBS Americas challenged trainees to design a cost-saving strategy, one young woman proposed that the company install software that puts a computer into sleep mode after a period of inactivity. This idea was calculated to save up to $400,000 a year for every 1,000 computers and the practice was quickly adopted.

The trainee, who didn’t have a college degree, saved the firm hundreds of thousands of dollars. As remarkable as this is, it isn’t an isolated example. Indeed, in our interviews for the study “Making Youth Employment Work,” conducted in collaboration with the U.S. Chamber of Commerce Foundation, we heard story after story of revenue increases, cash savings, and tangible workforce improvements that smart companies are realizing by tapping into the potential of workers who are 16–24 years old.

Corporate leaders told us that employing young adults is not a charity project or “nice-to-have” anymore. Instead, it’s about concrete business benefits. The investments in young adult workers pay off in four important ways. They:

Create a robust pipeline of their company’s next generation of talent.

The companies in our research represent a range of industries, and vary in size from small local firms to global powerhouses. Moreover, our study uncovered a range of successful approaches to employing young adults, from building in-house training to partnering with outsourced providers. What these companies share is a recognition that a strong youth talent pipeline is critical to their success.

Despite these advantages, the potential of young adult workers seems to be a well-kept secret. While 40% of U.S. employers struggle to fill more than 5 million open jobs, 6 million young adults are neither working nor in school. Many employers want to develop a robust pipeline of young talent but report that they are not sure where to start. Here are five practical approaches recommended by leading employers.

1. Link your youth employment strategy to your business strategy, and find champions. Successful integration of young adults into your workforce requires both top leadership support, usually someone in the C-suite, and a day-to-day sponsor. The trick is for leaders to identify business needs and assign new recruits to areas of real value to the business. For example, when medical technology and services company Medtronic needed to economize by identifying unused IT equipment, it gave the project to one of its young interns. By scouring equipment inventory spreadsheets, the intern saved Medtronic $342,370 on its maintenance contract.

2. Expand your talent sources of young adult workers. Many firms want to cast a wider net, but don’t know how. In simple terms the answer is to go where the youth are, or partner with experts who can help. For example, Bloomington, Illinois-based State Farm has created recruiting centers in Dallas, Atlanta, and Phoenix, which more accurately reflect the demographics of its customer base. And Hasbro is partnering with a leading nonprofit, Year Up, to train outstanding apprentices within Hasbro who then apply for jobs at the company. The company plans to hire at least three-quarters of the program grads. Tapping into successful intermediaries like Year Up can provide an inherent vetting process and work-ready candidates.

3. Examine business policies that inhibit youth hiring. One recent study by Burning Glass Technologies found that fewer than 20% of executive assistants have a four-year college degree, yet 65% of current job postings for the position require it. This “credential inflation” not only exacerbates the problems employers face in filling positions, it also has serious implications for middle-skill jobs.

To remedy this, decision makers need to reconsider what credentials are truly necessary for a given job and revisit hiring policies and processes that may be shutting out qualified candidates. Grads of Life’ Hiring Guide is one helpful how-to blueprint for creating both diversity and youth-friendly hiring practices.

4. Prioritize soft skill development. Many business leaders believe young adults are lacking in soft skills, which leaves them ill-equipped for the teamwork, professionalism, and communication most jobs require. The good news is that soft skills are teachable. As one example, Georgia’s Southwire, a leading manufacturer of wire and cable for the distribution and transmission of electricity, structured its successful 12 for Life program to include soft skills training in the context of work. High school students mix classroom time with time on the floor of a real manufacturing plant, for which they receive a paycheck. The students participate in workshops, one-on-one mentoring, and other instruction to learn important life skills. In particular, the program seeks to instill a strong work ethic by focusing on key traits such as respect, attitude, and teamwork.

5. Measure and improve over time. While companies in our study consider young adults to be an important part of their talent pipelines, few currently separate them out in order to track outcomes. But measuring progress can demonstrate how a youth employment strategy goes beyond the social good and can make the business case for the positive effects such a plan can have.

Wegmans grocery chain sets an example. It has a close partnership with the Hillside Work-Scholarship Connection, a nonprofit agency that trains at-risk students to be work-ready employees. The partnership helps Wegmans met its diversity goals, and it has reduced part-time high school workers’ turnover rate from 26% to 19%. Lower turnover is a direct benefit to the company. And a more diverse staff helps to attract a more diverse range of customers. “Because we focus on having our employee base mirror our customer base, there is a direct tie to sales,” says Gerry Pierce, Wegmans’ senior vice president of human resources.

Creating a successful youth employment program is no easy task, yet our study found dozens of business leaders who report that it’s increasingly critical to the lifeblood of their companies. And while many companies are not sure how to develop young adult talent, a growing number are investing in youth to meet their talent needs. Their examples show that even more businesses can realize tangible financial benefits by capturing tomorrow’s talent, today.

Susan Wolf Ditkoff is a partner at Bridgespan and co-leader of the firm’s philanthropy work.